Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 6, 2019


The Honorable Carolyn McGinn, Chairperson
Senate Committee on Ways and Means
Statehouse, Room 545-S
Topeka, Kansas 66612
Dear Senator McGinn:
SUBJECT: Fiscal Note for SB 74 by Senate Committee on Ways and Means
In accordance with KSA 75-3715a, the following fiscal note concerning SB 74 is
respectfully submitted to your committee.
SB 74 would provide a cost of living adjustment (COLA) beginning July 1, 2019, for
certain retirees who have been retired at least five years. The COLA would be applicable to all
Kansas Public Employee Retirement System (KPERS) groups. The structure of the COLA would
be the following: retirees who retired on or before July 1, 2014, would receive a 1.0 percent
increase; retirees who retired on or before July 1, 2009, would receive a 2.0 percent increase; and,
retirees who retired on or before July 1, 2004, would receive a 3.0 percent increase. However, any
increase in the monthly benefit from the COLA could not exceed $150.

Estimated State Fiscal Effect
FY 2019 FY 2019 FY 2020 FY 2020
SGF All Funds SGF All Funds
Revenue -- -- -- $17,310,000
Expenditure -- -- $10,730,000 $13,140,000
FTE Pos. -- -- -- --
According to KPERS, it is estimated that SB 74 would increase the total unfunded actuarial
liability (UAL) for all groups (including KPERS Local and KP&F Local groups) by $185.7
million. While the bill does not specify the length of the amortization period to fund the COLA,
KPERS’ consulting actuary assumed amortizing the increase to the UAL over 15 years. Under a
15-year amortization period, it is estimated that the bill would require additional employer
The Honorable Carolyn McGinn, Chairperson
Page 2—SB 74

contributions from all groups totaling $17.3 million in FY 2020. When local groups are excluded,
the state’s portion of the cost would be $13.1 million in FY 2020. Based on information from the
FY 2020 Governor’s Budget Report, the Division of the Budget estimates that approximately 82.0
percent of FY 2020 expenditures for state and school district employer contributions are from the
State General Fund. If this percentage is used to estimate the approximate fiscal effect to the State
General Fund, it is estimated that $10.7 million would be needed from the State General Fund in
FY 2020.
The additional employer contributions to pay for the COLA would result in $17.3 million
being remitted to the KPERS Trust Fund. Any fiscal effect associated with SB 74 is not reflected
in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Jarod Waltner, KPERS